I've made an item that I want to use to increase the players reach. It's basically a block teleporter, but that's not relevant. I want it to increase the range if it's in a player's inventory, but only if it's in the hotbar. I know how to make it detect if it's in the hotbar or not, I just don't know how to increase the player's range when they have it.

It is quite simple, just need to call setBlockReachDistance like so:

((EntityPlayerMP)entity).theItemInWorldManager.setBlockReachDistance(double distance);

You just need to call this method with a double, (the default reach distance according to ItemInWorldManager is 5.0D).

is it ok to put that in the onupdate or would that cause too much lag?

You should only need to call this method the first time when your item enters the hotbar and when a player that has the item rejoins the server.

is it ok to put that in the onupdate or would that cause too much lag?

 

Dude, you could call that method ten thousand times per tick and the user wouldn't notice.

 

-TGG